Tag: mexico

As I mentioned in my last post about my hot air balloon ride, one of my weekend trips out of Mexico City took me to San Miguel de Allende. I had been hearing about this city for well over a year (since my last stint living in Mexico) and was excited to finally get the chance to check it out. I have to say, while it was a very pretty little city and I had a lovely time, I didn’t think it was anywhere near as special as I’d been led to believe. It definitely wouldn’t have been worth the trip out if San Miguel de Allende were the only attraction and I hadn’t also been able to enjoy the hot air balloons in Tequisquiapan.

Some people absolutely adore San Miguel, however, so you may still want to check it out if you ever have the opportunity. The pictures below will give you an idea of what to expect.

Wrapping up my time in Mexico, I spoke with Marcus Dantus, the CEO of Startup Mexico , former Director of Wayra Mexico and Startup Labs Latin America, and serial entrepreneur. He was very candid about the state of Mexico’s entrepreneurial ecosystem and shared some insights that I had not heard from other interviewees.

As Marcus was educated in the U.S., I asked him about the seeming idolization of the U.S.’s entrepreneurial ecosystem and he had an interesting take:

“I think Israel has the best ecosystem in the world, [not the U.S.]” he told me. “I think that Silicon Valley is the one that started it all and it really remains an inspiration to Latin America. Everyone here aspires to go to Silicon Valley because they assume that there is so much more money there and that everyone becomes millionaires, but they don’t know the odds of that or how hard it is.”

“I believe that Mexico has an even bigger opportunity now than the U.S.,” he continued. “Being in Mexico now, you’re probably going to get money more easily than in the United States. Maybe not all of the way because there are still no exits here,” but at the early stages, yes.

“The main problem in Mexico,” he told me, “is that there is not enough activity in mergers and acquisitions, number 1. It’s a country mainly run by monopolies so they’re not keen on mergers and acquisitions because, why would they, if they have no competition? Another problem is the stock market because in order to reach an initial public offering in Mexico you have to sell millions, hundreds of millions of dollars. There is no alternative market yet….[But], the companies in Mexico that are looking for an exit probably should go to Europe or the U.S. They don’t need to exit in Mexico.”

Part of Marcus’ mission with Startup Mexico is to educate the entrepreneurs that aren’t being served by what’s currently available to them.

“Mexico is one of the most creative countries in the world, in my opinion,” he said. “The problem is that we are not well guided in using that creativity and I think that with a little bit of guidance we can really help come up with some innovative solutions.”

He argued that the key players in the ecosystem were not having the effect that they could have because they were not collaborating in an effective way:

“The problem is that they’re sometimes not on good terms with each other,” he told me.

“If you try to make a national collaborative effort and the main players don’t collaborate with each other, it doesn’t make sense.”

Additionally, he felt that the current model of creating accelerators and incubators was helpful, but only to the standouts and not to the overall ecosystem.

“The companies that don’t make it don’t even get any feedback,” he said. “They just don’t win and that’s it. I think that sucks…[Additionally], they only have one class per year, so if you have a great company but you missed the deadline, you have to wait a whole year.”

That’s not to say he wants to baby the entrepreneurs:

“We really want to make sure that these guys remain hungry because hunger is what drives excellence,” he said.

He feels that more entrepreneurs in Mexico still need to be educated about the process of building a business and raising funds in order for the ecosystem to thrive and he points to this lack of education as one of the reasons that entrepreneurs feel there is a lack of capital.

“That’s a ridiculous statement,” he told me about the idea that there isn’t capital available for entrepreneurs in Mexico. “There’s a lot of money out there, a lot…

…Mexico in 2008 had two funds, two. So in 2008 you could have made that argument. In 2012 we had 14 funds; in 2013 we had 30 funds; and this year, I think, another 30 funds are being created. So there is plenty of money out there…

…The problem is that a lot of the ideas are not ready. Entrepreneurs think that just because they have an idea they should get money.”

He continued on to say that, “the other thing is that the funds used to be larger funds and guys would go to them and ask for seed money. There is a mismatch between the stage of entrepreneurs and investors sometimes…but I think there is enough money.”

That’s why he wants to continue to educate the entrepreneurs that may not make the cut with investors on their first try. “They have to get prepared,” he said, and he believes that they should “at least produce a prototype and prove product market fit and then try for funding.”

Marcus certainly has high hopes for the growth of the entrepreneurial ecosystem in his country, though he does see a bit of a bumpy ride ahead. When I asked where Mexico’s entrepreneurial ecosystem would be in 5-10 years, he said:

“Well, I think that the first thing that the ecosystem will need to do is to recover from what’s hitting us this year or next year. The ecosystem is two and a half years old and companies usually go bankrupt after two and a half years, so I think that we’re going to see a lot of companies fail and I think that’s going to scare a lot of late entrants that don’t understand what’s happening, but I think it’s normal.”

In fact, he thinks it’s a good thing: “There are a lot of funds being created by a lot of people that don’t know what they’re doing. The ecosystem will flush out the people that don’t understand, that don’t know it, that are only doing it because it’s the current opportunity, and we’ll be left with the people that should be here.”

He continued:

“There will be growth, but a lot depends on who wins the next elections. You have to follow through; it can’t just stop in the next 6 years. I think that Mexico actually has an opportunity to become an efficiency based economy, you know, an innovation based economy, in the next 5 to 10 years. And with that we could jump over 30, 40 countries and become one of the most competitive countries in the world, one of the richest, and I do believe that, but we need to get people to believe that and we need to work towards it.”

His statement that Mexicans must believe in their country’s potential came up a number of times in our conversation, as it had in other interviews I’d conducted. He quoted Andres Oppenheimer saying that,

“The whole world is bullish on Mexico, except Mexicans,” and continued, “I think that that’s a key component. Mexicans, we don’t believe.”

As I always, I will end with Marcus’ advice for aspiring entrepreneurs:

“The first and foremost advice that I would give anybody is to do what you like. To be an entrepreneur, everybody thinks it’s easy but it’s the hardest thing you can do and if on top of it you’re doing something you don’t like, it’s worse. Secondly is to be patient. Money will come, you can’t just do it for the money. The money will come if you’re doing something you like and something you’re good at…..You have to be an optimist. In Mexico you’re going to take hits from every side…You’ve got to be able to improvise, and stay afloat, and be an optimist, and not panic.”

One of my weekends in Mexico City I decided to take a little trip a few hours away to visit Tequisquiapan, Queretaro, and San Miguel de Allende. More on the other cities later but for now we’re going to talk about the highlight: a hot air balloon ride in Tequisquiapan.

I had never been on a hot air balloon ride before but had always wanted to do one. Given that this was Mexico and it was off season, the price was just too good to pass up. My friends and I booked a package that included 1 night at a hotel, dinner, breakfast, and the balloon ride, all for less than $200. The hotel and food were nothing special but they were definitely pleasant enough and certainly adequate since we were really only there for the balloons. In fact, if I had to estimate, I would say about 98% of the guests were really only there for the balloons.

We drove to the hotel from Mexico City on Friday afternoon, explored the town of Tequisquiapan a bit, checked in, had dinner, and then tried to get to bed at a reasonable hour because we would be picked up for our hot air balloon ride before 7am.

In the morning we got up and joined the other travelers to take the van out to an open field where the sun was just starting to come up as they began to inflate the hot air balloons. After a fairly useless safety discussion (“You may not jump out of the basket,” etc.) we were split into groups of 8, loaded up into our balloon baskets, and took flight. The baskets were actually much sturdier than I expected so the flight wasn’t scary at all and was actually quite relaxing.

Once we landed, the guides allowed us to walk inside of the still semi-inflated balloon and take pictures. Then we loaded back into the vans and were delivered back to the hotel where we had a champagne toast (if you can call that stuff champagne), enjoyed breakfast, had the option of purchasing photos of the tour, and then packed up and headed on our way.

All in all, it was a very fun experience and it was extremely low-key so anyone of any age or activity comfort level should be able to enjoy.

Sunrise: Time to inflate the balloonsMy friends and I before lift offOur Balloon CrewView from the hot air balloon basketInside the balloon getting ready to jumpJump!

We’re back in action after my radio silence while crossing the Atlantic on a cruise and this week’s interview is with Gerardo Sordo, the Founder and CEO of BrandMe.

A native of Mexico City, Gerardo is currently participating in the Wayra program in Mexico and, while we discuss many of the same topics that come up over and over again with most of my interviewees, he also went a bit deeper and shared some of the personal costs of entrepreneurship.

To start, of course, we had to discuss the entrepreneurial ecosystem in Mexico City, which Gerardo says is just starting out and is lacking in capital, a cooperative community, success stories, and cultural acceptance of entrepreneurship as a respected career choice:

CAPITAL:

“Here in Mexico the ecosystem is very ‘baby,'”

Gerardo said, “because the investors want to invest in very safe investments. In the USA, for example, the investors want to invest in the next big thing but in Mexico it’s not like that…

… here in Mexico the investors are more old school.”

He continued: “In the United States you have a lot of venture capitalists to maybe become a part of your idea – here in Mexico there are very few…

…opportunities for venture capital are just starting.”

COMMUNITY:

“In Silicon Valley and in the United States, in my opinion,” Gerardo said, “it’s more open to share ideas. Here in Mexico, if you have an idea, the culture is more like oh, no, no, no I don’t want to share my idea because maybe someone will take it.”

He describes the overall culture as more competitive than cooperative and, while he hopes this will change as the ecosystem develops he did say that,

“Here in Mexico, it’s very challenging to change the minds of the people, even the startup people…It’s more competitive.”

“I think we are creating a very strong entrepreneur stream. The problem is that in this entrepreneurial group, in this ecosystem, are people that don’t think about other Mexicans, people that just want money or want to steal.”

SUCCESS STORIES:

Another issue that Gerardo notes is a lack of success stories for entrepreneurs to aspire to. This issue has come up in nearly every interview I have conducted in Latin America. Luckily, Gerardo thinks this will change soon:

“I think that in the next 5 years we will have one [success story] that will be inspiration for Mexicans….one startup that will be a case study,” he told me.

CULTURE:

Hopefully, some success stories will also help change the culture to be more accepting of entrepreneurship as a legitimate career choice as Gerardo noted that it’s still not seen as an acceptable path by many Mexicans.

“This world [of entrepreneurship] is very new for the people that think traditionally,” he said. “They think you should go through school and get a job at a big company.” And that disconnect between an entrepreneur’s passion and ambition and what those around them think they should be doing can put great strain on a founder’s relationships:

“The downside to becoming an entrepreneur is the friends that you lose on the road” Gerardo said. “We’re from different worlds now.”

This mentality is changing as the ecosystem in Mexico continues to grow, however:

“In our parents’ day,” he continued, “people were not called entrepreneurs; they were called independent workers, and that was seen as a euphemism for not having a job… [But] the culture is growing up…Now it’s cool to be an entrepreneur in our days.”

So what’s Gerardo’s advice for aspiring entrepreneurs? He actually had quite a bit:

“My first bit of advice is to become passionate,” Gerardo told me.

“An entrepreneur needs to become very strong for the good times and the bad,” he continued. “If you have passion you can survive [the ups and downs of entrepreneurship].”

Secondly, “it doesn’t matter the idea…It’s more important the strategies, the partnerships, the investors…For me, the idea, okay, it’s important but the strategy and the implementation is more important,” Gerardo said.

Finally, Gerardo urges aspiring entrepreneurs to take initiative:

“Nobody is going to just give you money; nobody is just going to give you anything; you have to go and search it out,” he said. “We are one click of distance from everything,” he continues. “We need to make contact with the correct people…

If you are very smart and very motivated, you have a lot of power. If you are proactive you have a lot of power.”

The Torre Latinoamericana (Latin American Tower) in downtown Mexico City provides great views of the city (which seems to continue on endlessly to the horizon) and the surrounding mountains. There is an observation deck, however, I opted instead for visiting the bar 2 floors below and still got a lovely (and free) view right around sunset.

View of the city from the tower.View of the Zocalo from the tower.Getting close to sunset…My friend and I in the tower.Bellas Artes from above.The dirty window is ruining the view here a little, but you can still see.Post sunset view from the tower.

One of my favorite day trips while living in Mexico City was my visit to Xochimilco. Xochimilco, while formerly an independent city, is now actually one of the sections of Mexico City and is known (facetiously) as the Venice of Mexico. It’s a fun outing for people that want to escape the city for a nice day of food and drink on the water aboard small boats called trajineras. Basically, you hop on and float around the hundreds of (crowded) canals just enjoying time with your “shipmates.” You pay by the hour for your time on the trajinera (you pay by boat, not by passenger) and there are vendors that float around on other boats offering up everything from roasted corn on the cob to serenades from live mariachi bands.

If you have more than a few days in Mexico City and a great group of friends to go with, I would definitely recommend this outing.

Bienvenidos a XochimilcoThe “gondoliers” steer the trajineras with long sticks – harder than it looks I thinkThe flags and names at the top of each trajinera are based on past passengers – I was promised my boat would be named Cate and fly the US and Puerto Rican flags 🙂Mariachi serenadeMe with the mariachisWe got stuck in a bit of a traffic jamWe got stuck in a bit of a traffic jamSalud!My Xochimilco “shipmates” – France, Mexico, and the US represented 🙂

This week’s Startup Nomad interview is with Santiago Zavala, a Venture Partner with 500 Startups Mexico – one of the most active funds in the world, especially in emerging markets – and a former Founding/General Partner at Mexican.VC.

Unlike with many of my other interviewees, Santiago and I spent more time speaking about the development of entrepreneurial ecosystems throughout Latin America than just the situation in his native Mexico. He sees many similarities between all of the cities in the region vying for their place in the world’s startup ecosystem, but he also recognizes the distinctiveness of each.

“I think that we all have in common great talent. We’re really hungry, we’re really resourceful, and we’re really hard-working,” he said. But, “I would say every city…has a very specific context that makes them do things in different ways.”

“The economy in Argentina changes the way you target a market. Colombia, has a very specific culture that makes them think more on a city level rather than a country level and makes them more city oriented than continent oriented. Similarly with Mexico: very specific things in different parts of Mexico lead to different entrepreneurs and different startups happening in different places. So there are differences everywhere and I think anyone who is trying to hide that and just saying that they have access to the whole Latin American region because they have offices in one or two places is probably wrong.”

Because of these differences in cultures and economies, Santiago recognizes that Mexico City may not be the ideal city for every entrepreneur, though it certainly has a lot to offer to many.

“Anyone who is thinking that they can make their city or region or country the go-to place for everyone is probably going to have a really hard time,” he said. “It’s different for every entrepreneur.”

If an entrepreneur is building a company targeting the Spanish-speaking market, however, Mexico City can provide an abundance of opportunities. “We’re in a city of more than 20 million people,” Santiago explained, “so the odds of you being able to find your customer here are pretty big. The odds of you being able to validate with a big corporation here are pretty big, since most of the world’s major corporations have offices in Mexico City.”

If, however, you can acquire your customer online or your target customer is not in Mexico City, there may be other, better options for you for where to base your business.

“If you are building a product that you can acquire your users through the internet,” Santiago said, “and you can tell me that you’ll have a longer runway somewhere else…that’s fine. We don’t have the accelerator here because we think all companies should start here.”

As far as Santiago is concerned, each company has different needs and part of learning to be a good entrepreneur is being able to make the decision that is right for your startup and not necessarily the one that is most popular at the moment.

Despite not claiming that Mexico City is thespot for every new entrepreneur, Santiago is confident that the local ecosystem here will continue to grow and mature over the next few years.

“I’m literally betting everything on it being an awesome ecosystem,” he told me. “We have the same challenges as any other emerging market and we need to face them very clearly,” he continued.

“We are not sophisticated in almost every part of what it takes to build a successful startup because we haven’t seen any success stories…Every city, every entrepreneur needs to start thinking how we’re going to get more sophisticated…The goal is in 3 years to have companies in the Series A/Series B stage…

…I’m sure there will be 1 or 2 cities in Latin America that will have a very vibrant ecosystem in the next few years. I’m not sure if it’s going to be Mexico City. If not, I will have to move.”

Santiago also had an interesting take on the idea that the majority of startups in Latin America are “copy-cat” companies: companies recreating a business that’s already proven successful in another part of the world.

“Of course we see a lot of people that are trying to solve problems that are already solved in other places,” he said. “That’s the reason that you want to invest in emerging markets: there are still problems to be solved…I see a lot of people trying to solve similar problems but the solutions are so different [so] I don’t think there are copycats at all…

…All entrepreneurs need to be building on the shoulders of giants and there is absolutely no reason to reinvent the wheel, [but] the reason that the market was not using [the solution that exists in another region] was that it was not possible to use [the other solution] as it is in this geography…Anyone who thinks that you can just copy a great company is going to realize that it’s really, really, really hard…and when you try to do it in a very different place you are going to realize that there are very different challenges.”

Finally, what’s Santiago’s advice for aspiring entrepreneurs?:

“Try to understand what’s right for you,” he said.

“You need to make sure that you have a very clear compass. One bad decision is not going to lead you to serious problems – you will be able to figure a way out of it – but many bad decisions are going to take you to a place where it’s really hard to solve it and that’s why I think people need to be more sophisticated.” He urges entrepreneurs to really analyze the needs of their startup and not get swept up in the glitzy grant or accelerator programs that abound if they don’t actually add anything to your company.

“Try to talk with a lot of other people in your region about what is the right thing for your startup right now,” he said. And then, “work really, really, really, really hard and make sure that you know why you are doing it.”

Today’s post will be a quickie – just some photos of my time in Mexico City and I will do some other posts about specific attractions and adventures I’ve had here. The capital of Mexico is actually not one of the biggest tourist attractions in the country as many people prefer to head to the beach, however, it does have a lot to offer, as you’ll begin to see over my next few posts. Last year while I was here I took little day or weekend trips out to the pyramids of Teotihuacan, to Puebla, and to the pyramid at Cholula. This year I explored a bit of the city itself and will be sharing some weekend trips that are just a little further away, so stay tuned.

Fun fact: Mexico City is not part of any of the states that make up the United States of Mexico. It is a separate federal district (hence the name México, Distrito Federal) similar to Washington, DC in the U.S. of A.

Snapping some shots around the ZocaloOutside the huge church in the ZocaloRandom murals – sorry for the fuzziness – it was a friend’s camera, not mine 😉Palacio de las Bellas ArtesI actually don’t know what this building is but it looks pretty cool, right? Photo credit does not go to me though, thanks, James!The entrance to Arena México right before we head in to watch some Lucha Libre

This week’s Startup Nomad interview is with Angela Cois, the COO and Cofounder of LastRoom. She’s an Italian who relocated to Mexico many years ago and has been involved in the startup community practically since it began to grow in Mexico. The idea for her company was actually born during a Startup Weekend back in 2010.

Like many of the other people I spoke to in Latin America, Angela says that a lack of capital is really holding the ecosystem back.

“It’s a big problem,” she told me. “There is money but it’s difficult to catch the interest of an investor. There are plenty of traditional investors…but e-commerce or digital tech companies are quite far from their knowledge or perception and they see it as a very high risk investment.”

In her opinion, this is especially true in the so-called ‘valley of death,’ the time between a startup company’s initial seed funding and when it can generate enough revenue to sustain itself. Here in Mexico, specifically, she noted that accelerator programs and other seed funds have helped improve access to the very initial seed money needed to create a minimum viable product and launch; between this initial investment and the time that the company is generating revenue and needs growth capital of $1 million dollars or more, however, there are almost no options for funding, “unless you know people.”

“It’s a pity that very good projects just die because they run out of money,” she said.

She thinks that aversion to earlier stage investments in tech companies can and will change, however.

“It’s a culture,” she said. “It’s a culture that is gradually growing the last few years thanks to events and to a lot of initiatives that people are doing to promote the ecosystem, but this kind of sensibility or culture is not so strong here [yet].”

She believes that the cultural change and the growth in access to capital must come from the people on the ground in the entrepreneurial ecosystem here, not from government initiatives.

“It’s a matter of entrepreneurs, of people,” she told me.”And of investors; because without money you can’t keep on trying. You could have the best business model but if you don’t have money you can try for 3 months or 6 months and then you have to stop, you have to give up…

…I think that this organic growth can come from both sides:,” she continued. “From entrepreneurs and investors. We have to learn, both sides, we have to learn a lot.”

Along those same lines, Angela expressed another common sentiment among the Latin American entrepreneurs with whom I’ve spoken: that the ecosystem needs to see local role models in order to reach its full potential.

“We need to learn a lot because we don’t have great role models here,” she said. “We are the first doing this. It’s not the same as Silicon Valley.”

So what is Angela’s advice to aspiring entrepreneurs?

“Start your own business when you have personal savings [to fund it] and when you’re more mature in how you utilize your personal resources” she said. “It makes you more serious if you’re trying to figure out the best way to spend your money, focusing only on your priorities and on your core business, and this is very important because it makes you more concentrated. It’s a great thing for entrepreneurs.”

One of my quick little weekend day adventures while in Mexico City was a brief visit to the Castle of Chapultepec, a royal castle that been used as everything from a royal residence, to a military academy, to a museum. It’s easy to get to on public transportation (it has its own metro stop) and is a quick little adventure for a morning or afternoon in Mexico City that will give you some nice views of the city.

While I can’t say that the museum was all that impressive, it was fun enough and it was worth the trip to see the only(?) royal castle in North America, some great views of the city, and some interesting murals and artifacts. The day I went, there was also a free ballet performance on an open stage out in front of the castle’s entrance.

The castle behind me…too bright to open my eyes! lolView of Mexico City from the castle.The back of the castle…I think is supposedly the site of the niños heroes.Truthfully, I don’t remember what this is but it is in the front of the castle heading towards Reforma.Weird, bending, panoramic view from the castle.